by CIO Staff

Ex-Elpida Exec Pleads Guilty to DRAM Price Fixing

Nov 16, 20062 mins
IT Leadership

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A former executive at Elpida Memory will serve time in prison and pay a US$250,000 fine for participating in a global conspiracy to fix dynamic RAM (DRAM) prices, the U.S. Department of Justice (DoJ) announced Thursday.

D. James Sogas of Burlingame, Calif., has agreed to plead guilty to one felony charge of violating the U.S. Sherman Antitrust Act. The former vice president of sales at Elpida will serve a seven-month prison sentence if a San Francisco court approves the plea agreement.

Sogas has agreed to assist the DoJ in its ongoing investigation of the DRAM industry, the DoJ said.

The DoJ accused Sogas of conspiring with unnamed employees from other memory makers to fix the prices of DRAM sold to certain original equipment manufacturers from April 1, 2001, to June 15, 2002, and to coordinate bids on Sun Microsystems. DRAM auctions were held on Dec. 5, 2001, and March 26, 2002. The price-fixing scheme directly affected sales to several U.S. computer makers, including Dell, Hewlett-Packard, Apple Computer and Gateway, the DoJ said.

“Price fixing will not be tolerated, and we will continue our efforts to bring to justice both domestic and foreign-based executives involved in the conspiracy to fix DRAM prices,” said Scott D. Hammond, the DoJ Antitrust Division’s deputy assistant attorney general for criminal enforcement, in a statement.

Including Thursday’s announcement, the DoJ has charged four companies and 17 people, and has secured fines totaling more than $731 million, as a result of its ongoing antitrust investigation into price fixing in the DRAM industry. The $731 million in criminal fines is the second-highest total obtained by the Department of Justice in a criminal antitrust investigation involving a specific industry.

Samsung, the world’s largest DRAM manufacturer, pleaded guilty to the price-fixing conspiracy and was sentenced to pay a $300 million criminal fine in November 2005. Hynix Semiconductor, the world’s second-largest DRAM manufacturer, pleaded guilty and was sentenced to pay a $185 million criminal fine in May 2005.

In January 2006, Elpida agreed to plead guilty and pay an $84 million fine. In October 2004, German manufacturer Infineon Technologies pleaded guilty and was sentenced to pay a $160 million fine.

DRAM is the most commonly used semiconductor memory product, used in PCs, laptops, printers, hard-disk drives, mobile phones, digital cameras, video recorders, televisions, and telecommunication hubs and routers. About $25 billion worth of DRAM was sold worldwide in 2005, according to the DoJ.

-Grant Gross, IDG News Service (Washington Bureau)